Insurance industry expert Allan Manning has rejected the suggestion that Australia could benefit from adopting natural disaster cover modelled on New Zealand’s Earthquake Commission.

“I read with disbelief that Gerry Brownlee, the minister for the Earthquake Commission, claims New Zealand’s natural disaster insurance scheme has been a huge success and recommends Australia follow suit,” Professor Manning writes on his blog.

“I for one could not disagree more.”

Mr Brownlee said in an ABC radio interview this month there is potential for a similar scheme in Australia, given damage from storms and flooding.

“I don’t think anyone has a scheme quite like we do,” he said. “It’s worked well for us.”

Professor Manning, the MD of LMI Group, says many Christchurch quake claims are still not finalised, and a recent negotiated settlement confirms “many claims that had been settled had been done so on the wrong basis”.

“The fact there is both the Earthquake Commission and private insurers above this has proved not to work well, with the insured suffering as a result,” he said.

In Australia, state and territory governments have sold their general insurance businesses, and Professor Manning says a government scheme could become a form of hidden taxation.

“Government should only step in where there is market failure, and with tens of thousands of claims paid promptly and fairly every day, there is no need.

“I, and I’m sure many would agree, do not want to be paying for poor government decision-making that allows homes and other buildings to be built in floodplains, known bushfire zones or in the natural to and fro of the Australian shoreline.”